March 26 (Bloomberg) -- Bertelsmann SE, Europe’s largest
media company, said it plans to spend as much as 3 billion euros
($3.9 billion) on acquisitions over the next three years as it
seeks to grow and limit its reliance on Europe.

The planned sale of a 17.3 percent stake in broadcaster RTL
Group SA plus about an annual 500 million euros of net cash flow
will fill Bertelsmann’s war chest, Chief Executive Officer
Thomas Rabe told reporters in Berlin today. The company will
focus on individual deals worth “a couple hundred millions of
euros” rather than a single big acquisition that “wouldn’t fit
Bertelsmann’s risk profile,” he said.

Rabe, who took office at the beginning of last year, is
overhauling Guetersloh, Germany-based Bertelsmann’s portfolio
with a push into music rights, education and emerging markets.
The company, which benefited from the best-selling book “Fifty
Shades of Grey” last year, still relies in Europe for 80
percent of sales.

“It is our clear objective to grow the company in the next
couple of years,” the CEO said. “Assuming a little bit of
tailwind from a recovery in Europe, we expect to grow to 17
billion euros this year and 18 billion euros in the next.”

Bertelsmann’s sales grew 4.5 percent to 16.1 billion euros
last year, Rabe said. The forecast doesn’t include any potential
acquisitions. Operating earnings before interest and taxes from
continuing operations will remain at more than 10 percent of
revenue in coming years even as the company spends to introduce
new digital products and reorganizes some of its legacy
businesses such as printing.

Penguin Merger

The company’s Random House publishing unit agreed in
October to merge with Pearson Plc’s Penguin division to create
by far the largest book publisher in the U.K. and the U.S. This
year, Bertelsmann agreed to acquire full ownership of BMG Rights
by buying a 51 percent stake from its partner KKR & Co.

The Mohn family owns 19.1 percent of Bertelsmann, which was
founded in 1835 by Carl Bertelsmann. The rest is held by
foundations including the Bertelsmann Foundation and the
Reinhard Mohn Foundation, whose boards count some Mohn family
members.

An initial public offering of Bertelsmann is “off the
table for the foreseeable future,” Rabe said, adding that the
company will focus on raising funds at a unit level.